Approved Card is a decent first step in using plastic

Attention parents: Personal finance guru Suze Orman is promoting a new product that could help teenagers ease into the treacherous world of plastic. The author and television commentator calls her credit card alternative the Approved Card.

Attention parents: Personal finance guru Suze Orman is promoting a new product that could help teenagers ease into the treacherous world of plastic.

The author and television commentator calls her credit card alternative the Approved Card.

It’s actually a prepaid card, which is similar to a debit card except you don’t need a bank account or a spotless credit record.

Prepaid cards in general are simple to use. You can load money onto them and add cash when you’re running low. You can also make ATM withdrawals and deposits. However, these cards typically come with high fees.

Orman is the latest celebrity to endorse and market a prepaid card.

“Start your kids on the right track,” says Orman in her promotional materials. “Teach them to handle money responsibly.”

To that extent, her product is way better than, say, the Kardashian sisters’ prepaid plastic that quickly bombed and was pulled last year after public outcry over its fees.

The Approved Card has some appealing features for teens and college students. It has lower fees than many prepaid cards — as long as you use the card as Orman recommends.

The card comes with free identity theft protection and gives the cardholder free credit reports and scores for a year from TransUnion, one of the three main credit reporting organizations.

The Approved Card allows users to tap the Allpoint network of about 35,000 ATMs nationwide, mostly in drugstores like Walgreens and CVS.

Parents can open up to three Approved Card accounts for children age 13 and older. While your youngster will receive balance and transaction confirmation text messages, you can also monitor how the card is used by going to www.theapprovedcard.com.

But the Approved Card comes with some strings, so read the fine print carefully.

The Approved Card costs $3 to purchase and then has a monthly fee after the first month of $3.

That’s less than the base fees from American Express and the Green Dot, two of the most popular and affordable prepaid cards.

But Orman’s card does have other fees — 20 by my count. In contrast, the Amex card has only one fee and the Green Dot has eight, according to Card Hub, a consumer-oriented website that has evaluated the new prepaid card.

ATM withdrawals with the Approved Card are free as long as you deposit at least $20 each month onto the card. Otherwise, customers will be charged $2 per withdrawal.

You get one free customer service call a month. It’s $2 per call after that.

Prepaid cards like Orman’s also will not help your teen or college student build a credit history because transactions are not shared with the credit bureaus. So a credit card might be a better option, but only if your son or daughter is ready to take on that financial responsibility.

As prepaid cards go, Orman’s is a decent option as long as you follow the rules, according to Card Hub’s analysis. Yet for young consumers, that might be a tall order, said Odysseas Papadimitriou, Card Hub’s founder.

“Orman does appear to have made a greater effort to provide a beneficial financial product than other celebrity endorsers have in the past, and she should be commended for that,” he said.

While the Approved Card can help teach young users financial responsibility, Papadimitriou said, it “doesn’t provide extra features relative to the competition to promote this objective.”